Helium stakeholders urge government to push back sale of federal reserve

por John R. Fischer, Senior Reporter | January 23, 2024
MRI Parts And Service
Federal Helium Reserve
The Compressed Gas Association, AdvaMed, and other organizations are urging Congress to delay the General Services Administration’s sale of the Federal Helium Reserve on January 25 out of concern about the potential effects it could have on MR scanning in healthcare and other industries.

Formed from the radioactive decay of uranium and thorium in the earth’s crust, helium is a finite resource that often escapes into space, making it scarce on earth. Remnants trapped in rocks are extracted and used for various purposes, including the cooling of MR magnets for proper scanning function.

Since 1925, the FHR has supplied helium worldwide and is today the largest global supplier based in the U.S., providing 20% of the country’s helium supply. Under the Helium Privatization Act signed in 1996, the U.S. government began exploring opportunities to sell off parts of the FHR to private companies to reduce stockpile expenses, which at the time exceeded $1 billion.
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Because of this, the private sector cut back on its own helium production, leading to a supply shortage amid higher demands, which sent prices soaring and further strained budgets of hospitals, the largest end-users in the market.

While originally scheduled to be completely sold off by 2021, the sale has been delayed a number of times, with the most recent pushback made in November to this month, reported peer-review journal, Science. According to CGA, infrastructure, regulatory, and operational issues from the sale would create more disruptions and shortages, raise prices, and adversely affect U.S. geopolitical relations. It says that any challenges must be addressed before a deal is completed.

“This poorly structured and ill-timed sale would make lifesaving MRs less accessible, the chips that connect everything from computers to cars to airplanes less available, and would have an immediate impact on America’s national security,” said CGA president and CEO Rich Gottwald in a statement.

Among chief concerns is regulatory compliance under private ownership. The FHR spans Texas, Oklahoma, and Kansas, meaning any private owner will have to comply with multiple state-specific laws, which could lead to potential delays and uncertainties.

It also relies on the Crude Helium Enrichment Unit (CHEU) for helium extraction and enrichment. Just this week, helium supplier Messer, which runs CHEU operations, delivered one billion standard cubic feet of helium there, a major milestone. Should the CHEU agreement be non-transferable, the new reserve owner may face operational challenges.

Steven Ford

Sale of helium reserves to private corporation

January 24, 2024 12:38

Anyone who has experience in the helium markets knows that, while the federal government has a reputation for mismanagement of many things, turning over the remaining parts of the helium reserve to private ownership would be a disaster of huge proportions.
In the past four or five years, the prices our company has been quoted for liquid helium range from $14 per liter to $62 per liter, and from time to time we cannot buy it at any price at all. We frequently buy liquid and gas helium by the thousands of liters.
This impacts us and our customers, who strive to deliver quality, cost effective medical technology services.
The pricing volatility is, for the most part, caused by the seizing of profit opportunity by international corporations that hold an oligopoly on liquid helium supplies. If these reserves are sold it will make this situation far worse.

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